News analysis

Recession or not, there will be more pain ahead

As the global economy goes, so go the forecasts for Singapore's gross domestic product growth. At the start of the year, when the US-China trade conflict was already under way, the Government was predicting 1.5 per cent to 3.5 per cent growth - a wider-than-usual range, given the uncertainties that lay ahead.

On May 21, the Government shaved the upper end of that forecast, which was revised to 1.5 per cent to 2.5 per cent. Then yesterday came the most aggressive revision, to 0 per cent to 1 per cent because of new risks, including the possibility of another round of tariffs by the US on an additional US$300 billion (S$415 billion) worth of Chinese goods; a further economic slowdown in China, which would impact the region; a no-deal Brexit, which would hurt the UK and the European Union, which are among Singapore's major trading partners; and an escalating trade dispute between Japan and South Korea. A potential currency war could be added to the list.

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A version of this article appeared in the print edition of The Straits Times on August 14, 2019, with the headline 'Recession or not, there will be more pain ahead'. Print Edition | Subscribe